​The Q3 of 2015 was the worst performing quarter for the markets in the last four years. From height to bottom the Standard & Poors 500 dropped more than 11%, providing the first correction greater than 10% since 2011. Although market volatility is unsettling, please understand that corrections are a natural occurrence in a healthy market.

The volatility in third quarter was driven primarily by two events; fear of a global retraction (especially in China), and uncertainty of the Federal Reserve’s rate decision. However, we remain optimistic and see the recent pullback as a bull-market pause; we expect the DOW will exceed 20,000 at some point in 2016.

Q3 corporate earnings expectations have been lowered so extensively that we expect upside earnings surprises. The U.S. market is outperforming expectations, the European market is growing, and the Emerging Markets (especially China) continue to outpace developed economies. The housing and auto sectors remain strong and we are seeing stabilization in energy. We believe a rate hike in December is still imminent, and we expect this will be positive development for financial markets. We continue to like the following sectors: Financials, Energy, Health, Technology, Europe and the Emerging Markets.

October has begun with a nice lift from the bottom, but we predict volatility continuing. By year-end, however, we believe the markets will be growing.

We want to be the first to wish you and your family an magical, joyous, and healthy holiday season.

As always, please feel free to contact us with any questions or concerns.